3 Answers
3

As a DSLR user, you actually see through the lens, which is why it is easy to use a circular polarizer.

First is to know when to put it on and when not too:

It is not advisable to keep it on constantly, although I met people who do that, because it gives you 2 stops less light. This means your camera either uses slower shutter-speeds which makes things that move blurry or higher ISO which makes image grainy.

Polarizers are not useful in dull or diffuse light.

They are useful in bright directional light and you should see the effect right away when it is. Even in bright light, their effect is strongest at 90-degrees from the sun. If you are shooting into the sun or directly away, there will be very little difference.

Polarizers are not recommended for very wide-angle lenses, because of the previous point. In other words, if you get into your frame light that is parallel and perpendicular relative to the sun, the polarizer will only affect part of the light and your results will look very strange.

Second is the how part:

Looking through the viewfinder, frame your shot, zooming if necessary, then rotate the outer ring of the polarizer. Make sure it is tight enough otherwise, you'll unscrew the whole thing.

Rotate the ring until you see the most pleasing image. Generally the sky gets darker to a point and then start brightening up. At the darkest point, the effect is maximal but you may not want to go that far if it makes things look unnatural, such as the sky being much darker than the foreground.

Polarizers also remove reflections. If that is the goal, rotate the ring until you see the least reflection where you want it to go away. It is rare that it disappears entirely unless the surface is completely flat.

What would you consider a very wide-angle lens? I find myself using the 18mm part of my kitlens (18-55mm) more and more these days and I'm thinking about buying a 10-20mm or a 12-24mm lens. Would you say that polarizers are not recommended for those types of lenses?
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Kristof ClaesOct 28 '10 at 6:54

At 18mm on a cropped sensor body, your angle of view will be about 78 degrees diagonally. If you point it directly 90-degree from the run, you'll have 39-degrees on either side, it should not be so bad. If you point it so that the edge of the frame is at 90-degrees, the other side will be at 12-degrees from the sun so one side will show maximum polarization and the other will show virtually none. It will look quite artificial, as if you changed the sky for a gradient. Erica's example is good, look at the opposite corners of the sky.
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ItaiOct 28 '10 at 13:16

I have accepted this answer because I think it is the most applicable and comprehensive, however the others are also useful.
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BBischofFeb 4 '11 at 1:55

Always rotate your filter in the the direction that tightens the filter on the lens (without applying additional force). That way you will never accidentally unscrew the polarizer.
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Philippe A.May 22 '14 at 16:56

I would say the best way to use a circular polarizer is to turn it until highlights look appropriate. The general reason you need a polarizer is because of bright, often "point" highlights that create glare and obscure detail. A notable situation where this occurs is on the surface of water, where the reflection of light sources blots out the true detail in the water, reducing the impact of a photo.

There are numerous articles on the net that describe how to use polarizers in great detail with excellent examples. One of my favorite is Bob Atkins page, which has a superb example of a frog in water, with and without a polarizer: All about Polarizers - Linear and Circular. Ken Rockwell has a good page on filters as well, which includes information on how to use polarizers: Filters.

To quote:

For filters that have different
effects depending on rotation
(polarizers and graduated filters)
it's also easy. Take the filter off
the camera, hold it up to your eye and
rotate until you get the effect you
want. Note the position of the filter
(look for the position of the writing
on the outside or an index dot), put
it back over the lens and rotate it to
the same position.

Ken Rockwell

In my experience, you don't really need to take the filter off the lens, but to practice a bit, and get a feel for how the polarizer will work, it is useful to do this for your first few shots. Using a live view mode, if you have it, can also be useful. Sometimes it can be a little difficult to see in the viewfinder if you have a polarizer oriented perfectly for a shot. The key is to mitigate or eliminate glare on shiny or smooth surfaces. You should be able to see when this happens, and know you have the right orientation.

Something to be noted about some circular polarizers. A good one will not introduce too much of a color cast to your images, but all of them will introduce some color cast. I am not certain why this happens, but it seems to be limited to circular polarizers. Linear polarizers may cool your image somewhat, although again, a higher quality one should introduce minimal color cast. Sometimes it is useful to accept some highlight glare in favor of less color shift. Generally speaking, this can be corrected during post processing if you use RAW, but if you use JPEG, its best to pick the happy medium where you mitigate as much glare as you can without introducing a strong color shift.

If you're new to a polarizer, the effect can be so subtle as you rotate it that while it's working you don't see any difference.

Convince yourself something is happening by looking through the lens with the polarizer on and pointing it at an LCD monitor (which emits polarized light). The result will be very dramatic and you can make the screen go completely dark.

With this knowledge, walk out to your car and point your lens at your car's windshield while the sun is out. Turning the polarizer will make the bright glare go away, allowing you to see more clearly into the car.

The same effect can be seen with sunshine bouncing off of water, say on a lake or river. In some cases, you can visually penetrate the surface and see into the water's depths, depending on angle.

In each of these cases, the effect is going to appear more and more subtle, but because you're learning what to look for, the slight changes are going to be far more obvious.

If you point your lens at the sky and rotate the polarizer, you should see the sky getting progressively darker then progressively lighter again. What's often missed is that this effect is dependent on where the sun's direction is relative to where you're looking. So if the sun is behind you, you may see nothing at all. If the sun is 90 degress to you, it may appear drastic. (And obviously, avoid looking into the sun with remaining eye.)